By Bruno Waterfield - 21st April 2005
Bulgaria signs an EU membership treaty on April 25. Getting there has not been easy and Bulgaria’s efforts have impressed Brussels – and helped improve prospects for other Balkans EU hopefuls.
But paradoxically the achievement has not guaranteed electoral success domestically for a government which has delivered high rates of economic growth, budget surpluses, fiscal discipline, NATO membership and an EU treaty all within the last four years.
The government headed by Bulgaria’s Prime Minister, and former king, Simeon Saxe-Coburg Gotha is currently trailing in the opinion polls.
The centre-left Socialists – descendants of Bulgaria’s former Stalinist regime – are leading the running with 25 per cent against 14 per cent for the ruling National Movement for Simeon II (NMS).
Talking to visiting EU journalists in Sofia last week, Bulgaria’s Foreign Minister Solomon Passy defended “the most successful mandate of a Bulgarian government since the Second World War.”
“If we take a time machine to go back four years most of the things that have happened in the meantime sounded like mirages,” he said.
“Not many people believed, either in Bulgaria or abroad, that Bulgaria would succeed to complete negotiations with the EU on all chapters, to succeed to agree a date for accession and even the strongest optimists did not believe this date would be January 1 2007.”
Passy also points to the government’s impressive economic record on growth and investment. But success has been painful, he acknowledges.
Deeply controversial were EU demands that Sofia shut-down nuclear reactors at the Kozloduy power plant – commitments enshrined in Bulgaria’s accession treaty. “It will become an election issue, this is for sure,” he says.
Passy believes that to seal an EU deal the Saxe-Coburg Gotha government had to step outside the political cycle. “We had to make a lot of painful reforms,” he said.
“These are very, very painful, domestic reforms. It is quite natural that we have to pay for this as the price for change.”
“When our prime minister assumed this responsibility, he was very clear that he was working for the next generation not the next election.”
The country’s Deputy Prime Minister Nikolay Vassilev suggests that a set back at the polls could be part of a trend that has seen government instability in other new EU states – such as Poland or the Czech Republic.
He argues that electoral instability is not necessarily a marker of a bad government.
“The phenomenon has little correlation with whether a government has done a good job or not,” he said.
Vassilev does not think disenchantment directly springs from economic hardship, noting that Bulgaria’s minimum wage has increased by 73 per cent from BGN 85 per month (c€43) to BGN 150 (c€75) in the last four years.
“I don’t think there is any group that is worse off than four years ago.” “People might be fed up with a government but you cannot say that people have suffered.”
“It is usual for people not to be happy with what they have.”
A key problem for Bulgaria’s current government – and probably for future administrations – is that of dashed expectations.
The economic reforms necessary for EU, and euro membership have come at price. Bulgaria’s ‘currency board’ pegging the Lev at €1.95583 may bring stability but also requires tight fiscal discipline and the giving up of monetary powers.
Reining in state expenditure may play well to central bankers and Brussels but budget surpluses can jar with voters while unemployment remains high and social provision low.
Sofia ran a 0.7 per cent surplus in 2004 and is heading for a one per cent plus surplus in 2005. Corporate taxes are low, down from 24 per cent in 2002 to 15 per cent in 2005 – the government is pushing for a further reduction to 12 per cent.
Vassilev may boast that “Bulgaria is more liberalised than the EU”, but social problems are persistent.
Unemployment – while down to around 12 per cent from 19 per cent in 1999 - remains a key issue and a drag on a Bulgarian EU ‘feel good’ factor.
Asenovgrad, a Bulgarian town dominated by old communist-era industry in chemicals, mining and tobacco is likely to punish the national government in June.
The town’s Mayor Kiril Trendafilov says the local registered unemployment rate is 9.8 per cent but “the real one is much bigger”.
Local industries already decimated by the transition from Stalinism are still unlikely to prosper even inside the EU.
In March Bulgartabac’s Asenovgrad tobacco factory laid off 160 employees – the enterprise has now contracted from 500 to 40 staff.
The EU’s hostility to tobacco and Bulgaria’s high-tar and nicotine production does not give the industry much of a future – even with six year transitional exemptions on accession.
Trendafilov notes that current moves to small businesses, focused on textiles, are not absorbing all job losses.
And he warns that while citizens accept the inevitability of EU membership, a European future is viewed with trepidation.
Local workers in chemicals or tobacco related industry know that with EU safety regulations the writing is on the wall.
“Many people are waiting with a lot of fear for accession to the EU. But all of us recognise this is the only way,” he said.
Bulgarians may believe ‘there is no alternative’ to the EU but ‘TINA’ is not an argument for enthusiasm for the government’s record – particularly when expectations have not been met.
“The problem is that all of us hope to reach the levels of France and Germany fast,” said Trendafilov.
“In 1990 we thought that by 2000 we would be at a comparative level. That is why all these expectations have made people unsatisfied now.”
Government ministers have been forced to publicly lower popular Bulgarian expectations of EU entry.
On April 16 the country’s Social Policy Minister Hristina Hristova had to respond to official polling finding that 50 per cent of Bulgarians believe minimum wages will climb from BGN 150 (€75) to BGN 250 (€125) in the first four years of EU entry.
He argued that only a 40 per cent rise is likely – an argument unlikely to mobilise the electorate.
Vassilev goes further on Bulgarian expectations of reaching German wage levels when in the EU. “It will not be true, even in a 100 years,” he said.
Positive optimism for the future and EU membership tends to be concentrated in the minority professional middle classes, who make up the government but not an electoral majority.
“Those of us with a good education and jobs are very optimistic about the future,” said one state official.
Vassilev suggests that in terms of national voting Bulgarians may care more about bread-and-butter issues than EU reforms.
To counter disappointment, he reminds citizens that Bulgaria could go backwards towards the crisis ridden early 90s.
“Maybe people do care more about better healthcare, better roads… [but] in eight years people have forgotten things can go down too.”
Vassilev plays down the possibility of an electoral setback impacting on EU membership, predicting “a 50/50 chance we will have a coalition, with or without the Socialists”.
He does not see much chance of gains for the left-wing opposition hitting the reform process that Bulgaria must continue with to make the EU grade for January 1 2007.
“The good thing is that most of the parties have converged towards the same economic policies,” he said.
“The Socialists have for the first time something that resembles a programme. The good thing is that they have copied most of our ideas – which is great news.”
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